Earlier this year, we asked tech pros which major tech companies should be broken up. As Facebook, Amazon, and Google face increased government scrutiny and the specter of being split up, it seems tech pros are all for it.
In response to our survey, 44.2 percent of tech pros think Facebook, Google, and Amazon should all be split up into smaller entities, respective of their unique markets. A blueprint for this was laid out by Alphabet, the parent company Google spawned for itself as a means to allow loss-leaders to lose on their own merit during earnings calls (so entities like Waymo didn’t bring the whole of Google down). In theory, companies like Facebook could be split up into component companies in a similar way, although those sub-entities would be financially independent in order to avoid anti-trust legislation.
For example, Instagram, Messenger, WhatsApp, and Oculus would split off from Facebook. Or AWS, Twitch, and Whole Foods (all Amazon-owned companies) would have to stand on their own merit.
Nearly half as many tech pros (24.2 percent) think these companies should be left alone.
We also asked tech pros if they had one unique company they felt was a bad actor; some 13.3 percent say only Facebook should be dismantled, while 12.5 percent say Amazon should be on the chopping block. Far less (5.8 percent) say Google is the main offender and should be made an example of.
Google/Alphabet provided a blueprint for how other large tech companies can restructure, but it’s important to note Google’s move was a split-off, and the company was not split up.In a split-off, projects and subsidiaries (such as Waymo, or Google health-focused Calico) are re-organized as divisions of a larger company. On Alphabet’s site (which is still a static website with CEO Larry Page’s proclamation of the formation of Alphabet), the split-off is danced around:
What is Alphabet? Alphabet is mostly a collection of companies. The largest of which, of course, is Google. This newer Google is a bit slimmed down, with the companies that are pretty far afield of our main internet products contained in Alphabet instead.
Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related.
But the Alphabet stock ticker is ‘GOOG,’ the original Google stock ticker; Google’s Alphabet wasn’t a split-up at all. Facebook and Amazon operate in similar ways, with divisions (no matter how large or small) headed by independent leadership reporting to the head of the parent company (Zuckerberg, Bezos, etc.).
Actual split-ups look very different. In 2015, for example, HP Inc. and HP Enterprise were split off from Hewlett-Packard. The ‘Inc.’ business handles the computers, printers, and other devices we all buy and use, while the Enterprise side is tasked with Big Data, cloud computing, and business services. Each has its own stock ticker, and operates independently.
When the split-up happened, existing HP stockholders were offered the opportunity to shift their existing shares into whichever company they liked, or both. This is another good hint of why large tech companies don’t want to split; if you believe AWS has more upshot than Whole Foods, you’d undoubtedly invest there; the weaker subdivisions-turned-companies would suffer. Or to craft another hypothetical example, Instagram may prove a big winner, while Facebook proper might leave investors wary in the wake of its numerous (and ongoing) scandals. (Those scenarios are negated, of course, in the event of investors receiving proportional stock in each company upon a split-up.)
It’s also worth noting that asking ‘all’ major tech companies to be split up is actually asking for broad-based government oversight and involvement, which is not out of the question (but a scary prospect for many). As these companies make headlines for all the wrong reasons, the specter of being Ma Bell’d approaches.
For recruiters and hiring managers, this data is interesting because it suggests that tech pros aren’t necessarily enamored with giant companies. If you’re trying to recruit for a smaller firm, you can pull in top talent by highlighting a sense of mission, as well as the tightness of the team.